Bitcoin is recovering but some signs are bearish

On Saturday bitcoin managed to claw back up to a six-day high of $9,070.64 before falling back below $8,000 but climbed back up over $8,700 on Sunday.

In a span of 24 hours the price of bitcoin has gained 9.70 percent. This is also a full 40 percent above its low last week of $5,947.40. The sharp recovery from the low shows a short term bottom appears to be in place. However, bitcoin (BTC) is still off 39 percent on the year.

There have been a series of lower highs that show a falling trend line still rather than rallies to record highs as had happened previously.

The article notes that from August 2015 the Dec. 2017 the Relative Strength index(RSI) was below 30 on 4 different occasions and on March 2017 was just above thirty. On each occasion, bitcoin (BTC) went on to record highs

The RSI is a momentum indicator that was developed by Welles Wilder a noted technical analyst. It compares the magnitude of recent gains and losses over a time period to measure speed and change of price movements. It is used primarily to find overbought and oversold conditions.

The RSI provides a relative assessment of the strength of a cryptocoin or stock's recent price performance. RSI values range from 0 to 100.

Historically the RSI for bitcoin(BTC) has formed a v shaped recovery. The situation today looks similar now so that bitcoin should be on its way to record highs, but the chart shows this may be difficult. Bears have not been able to drive the RSI below 53 and an RSI of 80 to 90 has been at the tops of the recovery. But that 53 support level was breached during the latest fall and the RSI below 50 indicates bearish territory.

The 5-week and 10-week moving averages are now sloping downwards indicating a bearish sentiment. This may indicate the former pattern of recovering and reaching new highs after a decline may not happen.

The Coinbase article concludes: BTC could test the $10,000 mark in the short-run as the RSI on the 1-hour and 4-hour chart is rising and well short of the overbought region (above 70.00), but a rally to record highs (in line with the historical pattern) looks unlikely. The cryptocurrency may find it hard to hold on to gains above $10,000, courtesy of the bearish setup on the weekly chart. Rejection at the downward sloping weekly 5-MA and 10-MA could trigger a fresh wave of selling. On the downside, a daily close below $7,724.9 (Feb. 9 low) would add credence to bearish weekly chart and could yield a drop to $5,000.

As I post this article, BTC is up over $8,800 and up over 9.5 percent on the day. Check present price here.